Why have ‘end-user’ buyers become increasingly influential in global CRE markets

While definitely not the largest investor group in the market, accounting for only 9% of total global investment in H1, it’s notable that end-users have become a bigger force: by the end of H1 investment by them was up 7% on 2024, 14% on 2023, and 21% on the 2017-19 average.

The average deal size by end-users has also risen, up 40% on the pre-Covid-19 average, and their share of the largest deals is also up: they accounted for nearly 12% of all the $100million+ deals transacted globally in H1, over double pre-pandemic levels. While all the major real estate asset classes (offices, retail, logistics) are reporting this trend, it’s offices that are seemingly most of interest: with 44% of end-user investment going into the sector, these buyers accounted for 20% of global office investment in H1.

A global trend – but APAC leads

Notable end-user transactions this year include Pacific Gas & Electric’s (PG&E) US$985 million acquisition of 300 Lakeside Drive in Oakland, California, and CMA-CGM acquired the Quadrans Est building in Paris for €290 million – the 25,000 sq m asset is occupied by the RMC BFM group, which was acquired by CMA-CGM in 2024. Globally, however, six out of the 10 largest markets were in APAC with Seoul number one overall, having seen several end-user deals, each around US$500 million, close in H1. The largest, KDB Life Tower, was purchased by CJ Corporation, which leases approximately 40% of its office space, in a deal Savills advised on their behalf for approximately US$495 million.

Motivated by cost and future rent rises

So what’s behind the increase in investment activity by end-users? Unsurprisingly, the biggest driver tends to be cost. Many occupiers are taking advantage of a rebasing in property values to acquire their buildings before prices rise, and benefit from a potential upside long-term as capital values recover. They are also hedging against continued rental growth: in many major cities, there is a shortage of prime quality space and a limited development pipeline, so being an owner-occupier removes concerns about rental increases and provides security of tenure. In the words of PG&E itself, when it finalised its purchase in June: “Compared to leasing, purchasing the building is the lower-cost option for PG&E and its customers over the long term. The California Public Utilities Commission, in reviewing the proposed transaction, also concluded that buying the building is more cost-effective than leasing”.

In many cases, end-users are also able to secure lower financing costs than your average real estate investor through acquisition, especially if they borrow at a company, rather than asset, level. Looking at the example of Seoul again; the city has a prevalence of end users happy to take a common equity stake, securing their occupation, while making it easier for asset management companies to raise preferred equity from, principally, domestic-based limited partners. This often means other investors are unable to compete on pricing.

With several of the factors driving end-user buyers being cyclical, we may see their propensity to buy reduce as the markets continue to recover. Having said that, the structural trend towards lower development levels and a squeezed pipeline of space looks set to continue in many geographies for some time, so this may remain a driving force behind more end-users making the decision to become landlords in the short- to mid-term.

Further information

Contact Oliver Salmon or Rasheed Hassan

Savills Takes Stock: Global Real Estate Capital Markets Q2 2025 - Offices